With a properly structured 1031-Exchange, taxpayers can defer payment of the capital gain tax after the sale if they reinvest the sales proceeds in the other “like-kind” property.

Transactions involving tax-deferred exchanges are subject to close scrutiny by the IRS and involve complex Treasury Regulations, Revenue Rulings and Internal Revenue Codes.

We draft and review 1031-Exchange agreements and ancillary documents to make sure that the transaction is properly structured, timely executed and complies with all applicable tax rules.

To determine the most optimal structure for the client’s 1031-Exchange, we carefully analyze the property’s ownership structure, the client’s income tax bracket, the market value and cost basis of the client’s property, the value of property improvements, reported losses, carryovers and deductions.

Common 1031-Exchange structures include:

Simultaneous Exchange

Delayed Exchange

Reverse Exchange

Construction / Improvement (Built-to-Suit) Exchange

“Drop and Swap” and “Swap and Drop” Exchanges

Use of Delaware Statutory Trusts for Replacement Property

Dissolutions and Liquidations of Partnerships Followed by Exchange

Representing the buyers, we negotiate contract of sale with the seller’s attorney and ensure that the seller agrees to cooperate with our client and the qualified intermediary to complete the underlying 1031-Exchange.

Representing the sellers, we draft contract of sale and negotiate it with the buyer’s attorney. We ensure that the buyer agrees to cooperate at no additional cost to the seller to complete the 1031-Exchange, including assignment of the seller’s contractual rights and obligations to a qualified intermediary.

Our New York City real estate law firm can also assist clients with selecting a qualified intermediary to hold 1031-Exchange proceeds and make sure that such intermediary has necessary technical experience to complete the transaction and maintains a bond to cover possible losses.